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[EquisMetaStock Group] Simple Trading Method for New Metastock Users



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Here's a really simple way to make some money while you're learning 
more complex methods of trading. 

I like to use it to make a quick trade or two when my regular trading 
isn't producing enough to use my capital account effectively. I trade 
it on 30 min and 10 min screens. I don't know if it works well EOD, 
especially in a choppy market. I don't trade it that way so I don't 
know.

Set up a new indicator and put in the following

Moving Average Ribbon 
Periods := Input("Time Periods", 1, 1000, 20);
Spacing := Input("Spacing", 1, 100, 5);
Ribbons := Input("Ribbons", 1, 12, 12);
BaseMA := Mov(C,Periods+(Spacing*0),S);

If(Ribbons>=2,Mov(C,Periods+(Spacing*1),S),BaseMA);
If(Ribbons>=3,Mov(C,Periods+(Spacing*2),S),BaseMA);
If(Ribbons>=4,Mov(C,Periods+(Spacing*3),S),BaseMA);
If(Ribbons>=5,Mov(C,Periods+(Spacing*4),S),BaseMA);
If(Ribbons>=6,Mov(C,Periods+(Spacing*5),S),BaseMA);
If(Ribbons>=7,Mov(C,Periods+(Spacing*6),S),BaseMA);
If(Ribbons>=8,Mov(C,Periods+(Spacing*7),S),BaseMA);
If(Ribbons>=9,Mov(C,Periods+(Spacing*8),S),BaseMA);
If(Ribbons>=10,Mov(C,Periods+(Spacing*9),S),BaseMA);
If(Ribbons>=11,Mov(C,Periods+(Spacing*10),S),BaseMA);
If(Ribbons>=12,Mov(C,Periods+(Spacing*11),S),BaseMA);


Open a 30 minute chart with the clean template and drop this 
indicator on top of it just like you were using a moving average, 
which you are. The default values are good enough for now. Set up a 
template so you can scan a number of stocks with it.

You will see that when the price breaks out above or below the 
ribbon, it will keep it's momentum until it breaks down and returns 
to the ribbon, finds support and reverses or breaks through the 
ribbon. The same is true on the down side. 

When you have a stock that's breaking through the ribbons (both up 
and down), it's good for some small gains. To profit from these moves 
you have to setup some trading rules. Keep them simple.

1. Set a profit target. If the target is met, get out even if the 
trend is continuing upward. The slope of the bands tell you the 
strength of the trend and the likely hood it will continue.

2. Exit the stock if it starts moving sideways in a trading range 
pattern. 

2. Absolutely get out if the price turns back toward the bands and is 
heading toward them in a steep decline (or rise) or if it touches the 
bands. 

The point here is to make money, not ride the trend until it's 
exhausted. 

Don't email me asking for an exploer program to find the 10 stocks 
that are on the edge of the ribbon. You don't need one. 

Take 100 of your favorite stocks, open 30 minute charts on them with 
this indicator in each one, and you'll see which ones are good 
candidates for the next day. In addition, most stocks will move 
through the bands several times over several days on a 30 min chart. 
Of course, they will move more often through the bands on 10 min 
charts but the moves are usually shorter. 

I'm sure there's plenty of "boo" birds who want to take exception 
with what I'm saying. If you feel the need to comment, make the 
comments constructive rather than trying to impress everyone with how 
big your ego is. For those half wits that show up here sometimes--
constructive means providing alternatives that help "everyone" learn 
better ways to do things, not embarrass or put them down.

Now that that's out of the way, check it out. It's an easy method for 
beginners to use (I use it, and I've been trading for a living for 
several years.) 

You can also use it to learn how to read your indicators. Basically 
your indicators should be picking up the price moves slightly before 
a stock enters the bands or when it's in the middle but hasn't broken 
out yet. 

Some people will argue you can use one or two moving averages and 
accomplish the same thing. That's true, you can. However, this method 
is simple and works well. I think it can help break the habit of 
wanting to only buy bottoms and sell tops. You'll grow old and poor 
trying to do that. By the time the a stock breaks through the bands, 
it's a long way from it's bottom, and if you stick to the trading 
rules you'll never sell it at it's top. 

Sometimes I compare my other systems against something simple like 
this to see how efficient they are over the basics. I have sadly 
found that often I don't need to bother with whatever brilliant idea 
I just got, when I can make more money just keeping it simple.

Don't over analyze. Don't complicate the decisions. Follow the three 
trading rules--write them down and glue them to your computer screen--
and at the end of the day you will be up for the day. You won't have 
made the maximum on each trade, but you will have had many more 
profitable trades than unprofitable ones. 

Give it a try. Write some trading rules and stick to them like glue. 
Be conservative and be careful. 

Good luck!










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